arrow on nozick

8/3/2019 Arrow on Nozick

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N O Z I CK 'S E N T I T L E M E N T T H E O R Y O F J U S T IC EK E N N E T H J . A R R O W

R o b er t N o z ick ' s [9 : C h ap te r VI I ] sh a rp an d in g en io u s a t t a ck o na ll p a t t e rn e d v iews o f d i s t r ib u t iv e ju s t i c e h a s a t t r ac t ed m u cha t t en t io n , r e sp ec t fu l i f o n th e wh o le sh a rp ly c r i ti c a l . I t i s p a r t o f al arg er a t t a ck o n p o l i t ic a l p o w er in g en e ra l. T h e e n t i t l em en t t h eo ry o fju s t ic e i s d e sig n ed in p a r t i cu la r t o u n d e rm in e th e v iew th a t t h e s t a t eo r so me th in g l i k e i t i s n eed ed to in su re r ed i s t r ib u t io n o f p ro p e r ty int h e n a m e o f ju s t ic e .In fo rma l t e rms , No z ick d o es n o t a ccep t t h e wid esp read d o c t r in eth a t t h e ju s t d i s t r ib u t io n o f g o o d s i s t o b e r eg a rd ed a s t h e o u tc o m eo f a so c ial d ec i s io n p ro ces s . I n d eed , h e wo u ld p ro b ab ly g o a s f a r a sBu chana n [3 ] in den y ing m eaning t o soc ia l dec is ion-mak ing . Al ldec is ions a re ind iv idua l , and these a re con t ro l l ing .T h i s a t t i t u d e m ig h t d raw so me ju s t i f i c a t io n f ro m th e d i f f icu l t i e so f c o n s t r u c t i n g a t h o r o u g h l y c o h e r e n t s oc ia l c h o i c e m e c h a n i s m . B u ti n m y j u d g e m e n t , t h e r e i s r ea l ly n o w a y o f e s c ap i n g a n o t i o n t h a tju s t ic e i s a so cia l p h en o m en o n , an d so m e v iew th a t i t m u s t b e th ere su l t an t o f an imp a r t i a l p ro ced u re i s e s sen t i a l . B ey o n d th a t , I d on o t b e li ev e th a t No z ick h a s co n s t ru c t ed a g en u in e ly co h e ren ts t ru c tu re o f su p p o r t in g a rg u men t s . I n d eed , h i s c a se r e s t s p r imar i lyo n a f ew d rama t i c ex amp le s , r a th e r t h an an y sy s t ema t i c a rg u men t .Fu r the r , there a re g rave d i f f icu l t ies in any defe nse o f h is sys tem as i ts tands. I t can be re fu ted b y ex am ples a t leas t as com pel l ing as h is .But i t m us t be ad m i t ted tha t he does raise se r ious i ssues tha t a ren eg lec ted in th e u t i l i ta r i an t r ad i t i o n , i n c lu d in g su ch o f f sh o o t s a sso cial ch o ice th eo r y an d we l f a r e eco n o m ics , an d in R awls 's f a irn e ssd o c t r in e . T h e s e r e vo l ve i n o n e w a y o r a n o t h e r a b o u t t h e n o t i o n s o fp r iv acy an d p ro p e r ty o f an in d iv id u a l , h i s c ap ac i ty an d h i s s co p e o fd ec i s io n , wh ich can n o t o r sh o u ld n o t b e o v e r r id d en b y so cia l o b lig a-t io n s o f j u s t ic e . T h i s m o d es t co n c lu s io n , h o w ev e r , is a l o n g way f ro mag ree in g th a t t h e re i s n o ro l e fo r so c ia lly m o t iv a t e d co n ce p t s o fju s t ic e a n d fo r t h e ro l e o f t h e s t a te an d o f m o ra l o b l ig a t io n in l arg ered is t r ibu t ions o f goods an d services .

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3/15

NOZICK'S ENTITLEMENT THEORY OF JUSTICE

An in d iv id u a l i s en t i t l ed to an y g o o d s acq u i r ed in th i s man n e r .B e f o r e t u r n in g t o t h e c o n t e n t o f j u s ti c e i n e a c h o f t h e t w o m o d e s o facq u i s it i o n , n o te a l read y th a t t h e re i s o n e im p o r t an t d i f f e r en ce f ro mthe u t i l i ta r ian t rad i t ion . What i s acqu i red i s the r igh t to spec i f icg o o d s , n o t m ere ly to l ev e ls o f s a t i sf ac t io n . No z ick i s v e ry ex p l i c i t o nth i s ma t t e r . A r eaUo ca tio n wh ich h u r t n o o n e b u t wh ich in v o lv ed anin v o lu n ta ry r e sh u f f l in g o f g o o d s w o u ld n o t b e ju s t i n No z ick ' s v iew." Pa re to o p t im a l i ty d o es n o t en te r No z ick ' s s to ry ; i n d eed , l ev e ls o fsa t i s f ac t io n d o n o t en te r i n an y way . No d o u b t , i f t r an fe r s a r ev o lu n ta ry , w e m ay a s su me th a t i n d ivid u al s d o n o t i n ju re th emse lv es ,so tha t the par t ies invo lved are a t leas t as wel l o f f . Bu t o f courseth e re i s n o g u a ran tee wh a tev e r t h a t o th e r s a r e n o t i n ju red b y an yd e f in i t io n ; i f A g iv es g o o d s to B , B m ay cease to acq u i r e th em f ro mC, who i s thereby in ju red . Th is poss ib i l i ty ex is t s in a compet i t ivemarket in any case; but the ut i l i tar ian wil l argue that whilee f f i c i e n c y w o u l d d e m a n d t h a t t h e m a r k e t n o t b e i n t e r f e r e d w i t h ,th e re may b e g ro u n d s fo r co mp en sa t io n to C . No z ick h o wev e r s ee sno such case ; the jus t ice o f the o r ig ina l acqu is i t ion i s no t in f luencedb y an y e f f ec t s o n th e fu tu re t ran s fer s .No z ick , u n l ik e th e w e l fa r e eco n o m is t , d o es n o t a s su me p e r f ec tco m p e t i t i o n ( s ee [9 : C h ap te r VI I , f o o tn o te 1 9 , p . 3 4 6 ] ) . He n ce ,P a re to o p t im a l i ty is n o t imp l i ed b y No z ick ' s v o lu n ta ry , j u s t t ran s -fe rs. Indee d , th ey m ay be un i la te ra l , g i f t s o r beques ts . Desp i te theimp o r t an ce o f t h e m a t t e r fo r No z ick ' s t h eo ry , t h e p rec is e d e f in i t i o no f jus t ice in t ransfe rs i s now here p rese n ted . Perhaps the be s t s ta te -m ent i s tha t t ransfe rs a re jus t i f vo lu n ta ry o r i f the ind iv idua lt r an s f o rm s w h a t is h is o w n t o a n o t h e r f o r m b y p r o d u c t i o n (p . 1 6 0 );fo rce and f raud a re exc lu ded (p . 152) , bu t no p r inc ip les a re g iven toju s t i fy th e se ex c lu s io n s o r ev en to d e f in e th em p ro p e r ly ( is o f f e r in g ap r o d u c t k n o w n t o t h e p r o d u c e r t o b e u n sa f e a f ra u d i f t h e r e is n opos i t ive a f f i rmat ion tha t i t i s sa fe? I s a fa i lu re to make sa fe ty tes t sf r au d ? ) .Jus t ice in o r ig ina l acqu is i t ion i s s t i l l more d i f f icu l t a concep t , asNo z ick ack n o wled g es . I w ill n o t r eh ear se h e re th e p ro b lem s wh ich h eh imse l f ra is es , u n d e r t h e n am e o f t h e L o c k ean p ro v i so , t h a t t h eo r ig in a l a cq u is i ti o n n o t b e a t t h e ex p en se o f so me fu tu re in d iv id u a l.As he no tes , i f t ake n l i te ra lly , i t can never ho ld fo r any scarce goo d .He sugges ts a weaker condi t ion , tha t the o r ig ina l acqu is i t ion nevermad e an y fu tu re in div id u a l wo r se o f f wh en th e g o o d acq u i r ed h a ssca rc ity v alue . We m ay s imp ly n o te tw o p o in t s h e re : (1 ) a t t h isp o in t , t h e id ea o f r i g h ts t o in d iv id u al g o o d s h a s b een r ep laced b y anequiva len t - sa t i s fac tion con cep t a f te r a l l ; (2 ) there rea l ly is no reason2 6 7


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KENNETHJ. ARROW

w h y e v e n t h e w e a k e r v e r s i o n o f t h e L o c k e a n p r o v i s i o n s h o u l d b ev a lid . W i th r eg a rd to th e s eco n d p o in t , su p p o se a p i ece o f l an d willev en tu a l ly b e a d e s i red s ca rce g o o d ; t h en , i f t h i s ev en t is fo r seen an dp e rm an e n t p ro p e r ty r ig h t s ex i s t , i t w il l h av e v a lu e to d ay , n am e ly th ed i sco u n ted v a lu e o f i t s f u tu re u se -v a lu e .I w i ll f o l lo w No z ick in o v e r lo o k in g co m p le t e ly th e ro l e o f p u b l i cg o o d s an d ex te rn a l i t i e s , t h o u g h th ey a r e in f ac t v e ry imp o r t an t . Iwi ll a l so , th ou gh th is i s s ti ll ha rd er to swal low, ov er lo ok the p ro b lemNo z ick h im se l f r ai se s o f r ec t i f i c a t io n o f p a s t i n ju st ic e s . T h e v e ryex i s t en ce o f su ch a p ro b lem a l r ead y sh o ws th a t a so c ia l d ec i s io np ro ce d u re i s n eed e d ; an d o n ce i t i s g r an ted th a t i t is n eed ed fo r t h isp u r p o s e , t h e r e i s n o r e a so n n o t t o f a ce t h e p r o b l e m o f j u s t ic e it s e lfin that lan~luage.

2 . T w o A r g u m e n t sOn e m ig h t ex p ec t so me se r io u s a rg u m en t s fo r so b o ld a d ep a r tu ref ro m th e u su a l m o d es o f a rg u m en t ab o u t j u s t i c e . I n f ac t , t h e ca se isr ema rk ab ly th in . R ea l ly , a s f a r as I c an t e ll , t h e re a r e ju s t tw o fo rm a la rg u men t s , a cco mp an ied b y th ree ex amp le s wh o se g rea t e s t v a lu e i sn eg a tiv e , c a s t in g d o u b t o n a l t e rn a t iv e th eo r i e s o f j u s t ic e . T h e fo rm a la rg u men t s a re n o t i n m y ju d g m en t v e ry s tro n g ; t h e ex am p le s a rem u ch m o re e f f ec t iv e . I n th i s s ec t io n , I w i l l an a ly ze th e a rg u m en t s .T h e ma in a rg u men t , n o t ex p l i c i t l y s t a t ed , i s t h e r ig h t o find iv idua ls to make some pr iva te dec is ions . Th is i s re in forced byappea l to Sen ' s l ibera l i sm para do x [14 : C hapte rs 6 and 6* ] : I f ther ig h t o f an in d iv id u a l t o m ak e a p r iv a t e ch o ice i s i n t e rp re t e d a s h isr igh t to f ix the re la t ive pos i t ions o f ce r ta in a l te rna t ives in the soc ia lo rd e r in g , t h en a co n t r ad ic t io n to th e P a re to p r in c ip l e can b e fo u n d .I t i s n o t e x a c t l y t r u e t h a t p r i v a c y r e q u i r e m e n t s a r e c o m p l e t e l yn e g l ec t ed b y e i t h e r w e l fa r e e c o n o m i s t s o r R a w l s [ 2 ] . T h e y a p p e a r a sth e l imi t s t o r ed i s t r ib u t io n imp o sed b y in cen t iv e co n s id e ra t io n s . T h eac t io n s n eed ed fo r t h e ach iev em en t o f a j u s t r e so u rce a l lo ca t io n m ayn o t b e p o s s ib l e o r d e s ir ab le to en fo rce . T h u s , an in d iv id u a l w i thspecia l t a l en ts m ay n o t ch o o se to ex e rc is e th em w i th o u t sp ecialr eward ; i f we d o n o t w i sh to le av e th e ch o ice to h i s p r iv a t e d ec is io n ;f o r t h e g o o d o f o t h e rs , w e m a y t h e r e f o r e h a ve t o p a y h i m m o r e t h a nw h a t w o u l d o t h e r w i s e b e a j u s t r e w a r d . F o r f u r t h e r c o m m e n t s o nth e th em e o f p r iv acy , s ee s ec t io n 5 .A seco n d a rg u m en t is t h a t o th e r t h eo r i e s o f j u s t i c e emp h as ized i s t r ib u t io n r a th e r t h an p ro d u c t io n . T h ese th eo r i e s " th a t o b jec t s a si f th e y a p p e a r e d f r o m n o w h e r e , o u t o f n o t h i n g , " w h e r e a s i n f a c t,

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NOZI CK'S ENTITLEMENT THEO RY OF J USTICE

" T h i n g s c o m e i n t o t h e w o r l d a l r e a d y a t t a c h e d t o p e o p l e h a v i n ge n t i t l e me n t s o v e r t h e m . ; " (P . 1 6 0).T h i s a rg u me n t i s n o t w e l l p u t . W e l f a r e e c o n o mi c s c e r t a i n l y d o e sn o t i ma g i n e t h a t t h e r e i s n o p ro d u c t i o n . A r e d i s t r i b u t i o n i s t w o u l ds i mp l y h o l d t h a t t h e o w n e r s h i p w h i c h g a v e s o m e i n d iv i d u al s s p e c ia lc l a ims t o p ro d u c t s s h o u l d b e m o d i f i e d i n t h e d i r e c t i o n o f e g al i-t a r i a n is m , e i t h e r b y d i r e c t r e d i s t r ib u t i o n o f o w n e r s h i p o r b y t a x a t i o nw h i c h h a s t h e s a m e e f f e c t iv e a im .W h a t is t r u e i s t h a t i n w e l fa r e e c o n o m i c s t h e o w n e r s h i p o f t h ep ro d u c t i s c o n c e i v e d o f ma i n l y a s c o n t ro l o f t h e p u rc h a s in g p o w e r i tg e n e ra te s . I f w e w a n t t o r e d i s t ri b u t e t h e in c o m e f ro m p ro d u c i n gs te e l, w e t a x t h e m o n e y i n c o m e n o t t h e s t ee l i ts e l f. N o z i c k i n s te a de m p h a s i z e s t h e ro l e o f e n t i t l e m e n t t o t h e p h y s i c a l p ro d u c t . B u t ina n y c o mp l e x e c o n o my w i t h c o n s i d e r a b l e s p e c i a l i z a t i o n a n d d i v i s i o no f l a b o r , is t h e e n t i t l e m e n t t o s p e c i f ic g o o d s o f a n y i n t e r e s t t oa n y o n e ? T h e p u r p o s e o f p r o d u c t i o n is n o t i nd e e d t h e p r o d u c t i o n o fg o o d s b u t t h e r i g h t t o a c q u i r e o t h e r g o o d s . O n c e i t i s g r a n t e d t h a t ap ro d u c e r s e e k s a v al u e (g e n e ral iz e d c o n t ro l o v e r g o o d s ) r a t h e r t h a np ro d u c t f o r i t s o w n s a k e , t h e c h o i c e b e t w e e n r e c ei v in g t h e m a rk e tva lue and rece iv ing tha t va lue l ess a ded uc t io n fo r red i s t r i bu t ionb e c o m e s s i m p l y a c h o i c e b e t w e e n a l te rn a t iv e s o c ia l a r r a n g e m e n t s .N e i t h e r o n e h a s t h e k i n d o f s p e c i a l s a l i e n c y t h a t N o z i c k ' s e mp h a s i so n e n t i t l e m e n t t o s p e c if i c g o o d s w o u l d s e e m t o r e q u i r e .3 . T h e T h re e E x a mp l e s .

( a ) T h e W i lt C h a m b e r l a i n S t o ry : Su p p o s e a n a ll o c a ti o n o fr e s o u rc e s d e e me d j u s t a c c o rd i n g t o s o me c r i t e r i o n (R a w l s ' s o ru t i l i t a r i an , e .g . ) i s ach ieved . Ind iv idua l s neve r the l e ss w i sh to engagein s o m e e x c h a n g e , in t h e e x a m p l e , p a y fo r t h e s e rv ic e s o f a b a s k e t -b a l l p l a y e r , a s a r e su l t o f w h i c h o n e i n d iv i d u al b e c o m e s v e ryw e a l t h y . Sh o u l d t h i s b e p ro h i b i t e d ?A c t u a l l y , i f t h e j u s t a l l o c a t i o n o f r e s o u c e s w e re Pa re t o e f f i c i e n t ,a s is u s u a l ly a s s u m e d , th i s e x a m p l e c o u l d n o t o c c u r ( a p o i n t w h i c hN o z i c k h i m s e l f o b s e rv e s , p . 1 6 4, fn . ). B u t a m o re c o m p e l l i n g v e r s io no f t h i s e x a mp l e w o u l d r e f e r t o u n i l a t e r a l t r a n s f e r s . Sh o u l d a ni n di v id u a l b e fo rb i d d e n t o g iv e m o n e y t o s o m e o n e w h o h a s a l r e a d yb e e n j u d g e d t o b e g e t ti n g e n o u g h ? T h e m o s t o b v i o u s p r o b l e m h e r e ,a s Lewis Car ro l l po in t e d ou t long ago [4: pp : 542 -54 6] is beq ues t ; i fan ind iv idua l i s en t i t l ed to co nsu m e , i s he t o be den ied the r i gh t tof o re g o t he c o n s u m p t i o n in f a v o r o f an h e i r w h o m i g h t n o t o t h e r w i sebe en t i t l ed to i t ?

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KENNETH J. ARROW

( b ) F o r c e d L a b o r : " T h e t a x a t i o n o f e a rn in g s f r o m l a b o r is o n p a rw i t h fo r c e d l a b o r . " F o rc e d l a b o r is n o t u n k n o w n , a t l e a st i n t h ef o r m o f c o m p u l s o r y m i l i t a r y s e r v i c e ; i t m u s t b e a d m i t t e d t h a t , i ns i tu a t i o n s w h e re t h e w a r i ts e l f i s a p p ro v e d o f a n d m o s t e li gi bl ei n d iv i d u al s a re n e e d e d , a n o v e rw h e l m i n g m a j o r i t y w o u l d p re f e rc o n s c r i p t i o n t o v o l u n t a ry s e rv i ce . B u t l e t u s n o t u s e m a j o r i t y v o t in ga s a c r i te r i o n o f e t h ic a l t h e o ry .

I t i s w o r t h n o t i n g t h a t , f r o m t h e v i e w p o i n t o f w e l f a re e c o n o m i c s ,t a x e s o n l a b o r i n c o m e a r e no t i dea l . Such a t ax d i s to r t s t he cho iceb e t w e e n l a b o r a n d l e is u re ( l e is u re is a fo rm o f in c o m e w h i c h e s c a p e st a x a t i o n ) a n d h e n c e l e a d s t o i n e f f i c i e n t r e s o u rc e a l l o c a t i o n . Th ei d ea l r e d is t r ib u t i v e t a x w o u l d b e o n p o t e n t i a l i n c o m e , t h e i n c o m ethe ind iv idua l wou ld ea r n in the h ighes t va lue use o f h is t im e fo rs o m e n u m b e r o f h o u r s f ix e d in a d v a n c e , i n d e p e n d e n t o f h i s o w nc h o ic e o f o c c u p a t i o n a n d h o u r s o f w o r k .

Ho we ver , such a t ax is i n feas ib l e because i t requ i red in f o rm at io na b o u t t h e i n d i v id u a l w h i c h t h e s ta t e c a n n o t h a v e . Th e a c t u a l i n c o m et a x i s d e fe n d e d a s a b e s t a p p ro x i m a t i o n . H e n c e , i n s o m e s e n s e ,N o z i c k ' s c r i t i c i s m w o u l d i n f a c t b e m e t i n a n i d e a l a p p l i c a t i o n o fw e l f a r e e c o n o m i c s .

N e v e r t h e le s s , o n e m u s t c o n c e d e t h a t a c t u a l ta x e s d o f a ll o n l a b o ri n c o m e . Th e y f a ll e q u a l ly o n p ro p e r t y i n c o m e , a n d i t is i n t e re s t in gt h a t t h e rh e t o r i c a l v a l u e o f N o z i c k ' s e x a m p l e , r e q u i r e s a d i f f e r e n -t i a t ion o f t he two sources o f i ncom e which , i n genera l , he is l o th tomake . I re tu rn to th i s ques t ion in sec t ion 6 .M o re o v e r , i t m u s t b e r e m a rk e d t h a t t h e r e i s a c o n s i d e ra b l ed i f f e r e n c e b e t w e e n a t a x o n l a b o r i n c o m e a n d fo rc e d l a b o r , a l t h o u g hthe re is som e resem blance . Once i t i s recogn ized tha t l abor i s spec i f i ci n n a t u re a n d t h a t t h e r e a re m a n y k i n d s , i t b e c o m e s c l ea r t h a t t h ef r e e d o m o f c h o i c e u n d e r a t a x i s v a s t l y g r e a t e r t h a n t h a t u n d e rc o m p u l s o ry l a b o r . I t i s s u rp r i s i n g t h a t N o z i c k , w h o i s s o c o n c e rn e do v e r r i g h t s t o s p e c i f i c b u n d l e s o f g o o d s , s h o u l d n o t t a k e c o g n i z a n c eo f t h i s d i f f e r e n c e . I n s h o r t , t h o u g h n e i t h e r y i e l d s a b s o l u t e f r e e d o mof cho ice , t he re is a l arge d i f fe renc e in a qu an t i t a t iv e sense be twe enthe two s i tua t ions .

( c ) A W o r ld o f I s o l a t e d In d iv i d u a ls : N o z i c k ' s r e fu t a t i o n o f R a w l ss t a r ts b y a s k in g u s t o c o n s i d e r a w o r l d o f i n d iv i d u a ls w i t h n oe c o n o m i c i n te r d e p e n d e n c e . T h e p r o d u c t i o n o f e a ch is in n o w a ya f f e c t ed b y t he b e h a v i o r o f o t h e rs . S u p p o s e in f a c t th e p r o d u c t sd i f f e r b e c a u s e o f p e r s o n a l a t t r i b u t e s o r s h e e r l u c k o r w h a t e v e r .W o u l d t h e re b e a n y o b l i g a t i o n o n t h e p a r t o f t h e fo r t u n a t e t o h e l pthe less lucky?2 7 0


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This i s a s ta r t ing po in t fo r h i s a rgum ent tha t even wi th in te r -d e p e n d e n c e th e r e i s n o o b l ig a t io n .The exam ple c lea r ly has som e com pel l ing aspec ts. Ho we ver , i t shyp o the ses a re som ewh at ha rd to env is ion . I f the ind iv idua ls d id no te v e n k n o w o f e a c h o th e r ' s e x i s t e n c e , t h e n th e q u e s t io n o f o b l ig a tio nwould ha rd ly a r i se . Hence , we mus t env isage a s i tua t ion where theind iv idua ls , pe rhaps on separa te bu t ne ighbor ing i s lands o r in af ro n t i e r s i t u a t io n , k n o w o f e a c h o th e r ' s e x i s t e n c e , c o u ld t r a n s f e rgoods to ea ch o th er , bu t a re se lf - su f fic ien t.I f t h e r e a r e u n c e r ta in t i es , s ay o f we a th e r , t h e n we wo u ld e x p e c t amu tu a l ly a d v a n ta g e o u s in s u ra n c e c o n t r a c t ; i f c o mmu n ic a t io n c a ntake p lace be fo re the even t , the re shou ld be a con t rac tua l ach ieve-m ent o f ega li ta rian ism.He n c e , t h e o n ly c a s e wh e re o n e wo u ld e x p e c t i n e q u a l i t y t o a ris ewo u ld b e w h e n th e r e a r e p e r s o n a l d i f fe r e n c e s i n a b il i ty , k n o w n inadvance . As in the p rev ious exam ple , a t te n t io n doe s ge t focussed onone ' s righ t to pe rsona l ab i l i ty .Even i f the exam ple is accep ted a t face va lue , i t does no t i t se l fa n s we r t h e q u e s t io n o f o b l ig a tio n wh e n th e r e i s e c o n o m ic in t e r-d e p e n d e n c e , i n t h e fo rm o f c o o p e ra t io n in p ro d u c t io n o r i nmutua l ly benef ic ia l exchange . At mos t , i t sugges ts tha t the r igh ts o fs o c i e ty t o r e d i s t r i b u te a re r e s t r ic t e d to t h a t p a r t o f t h e p ro p e r ty o find iv idua ls over and above w ha t eac h cou ld ach ieve by h im se l f a lone .Ho w m u c h o f a r e s t r i c ti o n th i s i s w ill b e t o u c h e d o n in s e c tio n 8b e l o w .

4. Som e Counter-ExamplesAs a l ready s t ressed , N oz ick ' s case does n o t res t on the assump t ion

o f p e r f e c t l y c o m p e t i t i v e m a r k e t s b u t r a t h e r o n t h e f r e e d o m t ot r a n s f e r a n d to e n t e r i n to mu tu a l ly a g re e a b le c o n t r a c t s . Bu t t h e n awh ole ho s t o f possible d i f f icu l tie s a r ise , some wel l kn ow n ine c o n o m i c t h e o r y .An e c o n o mic th e o r i s t wo u ld wo r ry a b o u t t h e p o s s ib i l i t y o fm o n o p o l i z a t io n a n d c o l lu s io n . S u p p o s e s o me in d iv id u al o w n s a ll o f ac e r t ain c o m m o d i ty , n o t i n di sp e n s ab le t o l if e p e rh a p s b u t v e ry u se fu l.Clea r ly , he can se t unu sua l ly h igh p r ices and engross fo r h im se l fwh a t m o s t i n d iv id u a ls wo u ld ju d g e to b e a n u n ju s t p o r t i o n o f th ew or ld ' s goods . I t ma y be ob jec ted th a t an ind iv idua l cou ld no t a r rivea t s u c h a p o s i t i o n ; if h e s o u g h t t o m o n o p o l i z e , h e w o u ld f in d , a sNoz ick remarks , tha t the p r ice o f the good would r i se . Moreprec ise ly , i t wou ld r i se in a compet i t ive wor ld . Bu t suppose every

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o r ig in a l o w n e r o f th e g o o d ju s t h ap p en e d to g iv e i t t o o n e in d iv id u a l .T h i s w o u l d b e j u s t i n N o z i c k ' s w o r l d , a n d t h e o u t c o m e w o u l d ha v et o b e d e e m e d j u s t , t h o u g h i n f a c t t h e m o n o p o l i s t re c ei v ed m o r ev a lu e t h a n t h e d o n o r s i n t e n d e d .Or , to be s l igh t ly more rea l i s t ic , suppose a l l the owners o f someg o o d ( a p r i m a r y g o o d , n o t o n e p r o d u c e d ) w e r e t o c o ll u d e t o c ha rg ea h ig h e r p r i ce . A l l th e ac t io n s in v o lv ed a re v o lu n ta ry ; is t h e o u tco m eju s t ?S u p p o s e a d o m i n a n t g r o u p , s a y w h i t e s o r " A r y a n s " , a g r e e d t ot r a d e w i t h t h e c o m p l e m e n t a r y m i n o r i t y o n l y o n v e r y u n f a v o r a b l et e rm s . I n d e e d , th e y m i g h t n o t h a v e t o a g re e in a n y c o n c r e t e s e ns e :s u p p o s e e a c h o n e h a p p e n e d f o r h i s o w n r e as o n s to r e so lv e t o s o a c t .R ac ia l d i sc r imin a t io n i s v e ry f r e q u en t ly th e r e su l t o f i n d iv idu a l f r eea c t io n s , j u s t d e c is io n s o n t h e p a r t o f th e m e m b e r s o f t h e m a j o r i t y i nN o z ick ' s t h eo ry . Are we to s ay th a t t h e r e su l ts a re ju s t ?In th e l a s t c ase , i t m ig h t b e r ep li ed th a t t h e min o r i ty wo u ld b ef r ee to t r ad e am o n g th emse lv es . I f t h ey h ad th e same per capitar e so u rce s , t h ey wo u ld n o t su f f e r . I f in f ac t t h ey h ad in fe r io rr e so u rce s, t h en p re su m ab ly th e re was a p rev io u s in ju s t ic e wh ich ,No z ick wo u ld h o ld , sh o u ld b e r ec t i f i ed . I w an t t o r e tu rn to th i sa rg u m en t in s ec t io n 8 ; I n o te h e re o n ly th a t in t h e p re sen ce o fin c rea s in g r e tu rn s to s ca l e, a m in o r i ty can su f f e r f ro m d i sc r imin a t io nev en wi th eq u a l pe r capita resources .No z ick , i t m u s t b e ad m i t t ed , is co u rag eo u s ab o u t t h e imp l i ca t io n she d raws: i f an ind iv idua l has d iscovered a cance r cure , he i s en t i t le dt o w i t h h o l d t h i s k n o w l e d g e , t h o u g h h e c a n n o t p r e v e n t o t h e r s f r o mm ak in g th e s ame d i sco v e ry .5 . P r ivacy .

On e co n c lu s io n wh ich No z ick ' s ex amp le s m ak e r ea so n ab le is t h a tan in d iv id u a l is en t i t l ed to so m e sp h e re o f d ec i s io n -mak in g o n h i so wn . In t e r e s tin g ly en o u g h , R awls , u su a l ly th o u g h t o f a s No z ick ' scomple te oppos i te , shares th is v iewpoin t as aga ins t u t i l i ta r ians andwelfa re economis ts . Rawls ' s d is t r ibu t iona l c r i te r ia a re in te rms ofwh a t h e ca l l s " p r imary g o o d s , " ab i l i t i e s t o d e t e rmin e l i f e p l an s ,r a th e r t h an sp ec if ic g o o d s o r t h e l ev e ls o f s a ti s f ac tio n ach iev ed f ro mth em . In e f f e c t , wh a t an in d iv id u a l d o es wi th h i s p r imary g o o d s i s h i sp r iv a te b u s ine s s, an d an y t r an s fe r o f t h em is j u s t .On e m ay g ran t t h a t t h e re sh o u ld b e so me sco p e fo r i n d iv id u a ls t om ak e p r iv a te d ec i s io n s . On e m ay ad d to th e co n d i t io n s o f j u s t i c e ,c o n d i t i o n s o f p r iv a c y . A s f ar as c h o ic e o f c o m m o d i t i e s is c o n c e r n e d ,2 7 2


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N O Z I C K ' S E N T I T L E M E N T T H E O R Y O F J U S T I C E

t h e P a r e t o p r i n c i p l e i m p l i e s t h a t t h e r e c a n b e n o c o n t r a d i c t i o nb e t w e e n t h e d e m a n d s o f p r iv a c y a n d t h e d e m a n d s o f j u s ti c e s o l o nga s t h e r e a r e n o e x t e r n a li t ie s . W h a t i f t h e re a r e ? C a n w e m a k e ac o n s i s t e n t s e t o f p r iv a c y j u d g e m e n t s w h i c h y e t p e r m i t so c ia ld e c is io n s? O f c o u r se , S e n ' s p a r a d o x sh o w s t h a t w e h a v e t o s ac r if ic et h e u n i v e rsa l a p p l i c a b i li t y o f t h e P a r e t o p r i n c i p le , b u t p e r h a p s w ecan s t i l l r e t a in i t f o r the non .p r iva te pa r t s o f the dec i s ion .

Th e q u e s t i o n m a y b e p o se d t h i s w a y . Th e t o t a l d e c is i o n sp a c e f o rs o c i e ty m a y b e e x p r e s s e d a s a C a r te s ia n p r o d u c t X o x X i x . . . x X n 'whe re the re a r e n ind iv idua l s . X i (i= l . . . . . n ) is the space o f p r iva tedecis ions avai lable to individua l i; i f indiv iduals are to be t rea tedsy m m e t r i c a l l y , t h e se sp a c e s a r e i so m o r p h i c . X o i s t h e sp a c e o f so c ia ld e c is io n s , f o r e x a m p l e , so m e a l l o c a t i o n o f p r i m a r y g o o d s in R a w l s ' ss e nse , o r , p e r h a p s , so m e a l l o c a ti o n o f g o o d s i n t h e o r d i n a r y s en sef rom which the ind iv idua l s a r e s t i l l pe rmi t t ed to make fu r the r t r adesand u n i l a t e r a l t r ans fe r s . W hatever ru le o f soc ia l dec i s ion-ma k ing isused wi l l be app l i ed to sa t i s f ac t ions given the pr iva te dec i s ions xieXi .To i l l u s t r a t e , l e t u s u se t h e c o n v e n i e n t u t i l i t a r i a n f o r m . S u p p o seeach ind iv idua l has an in t e rp er son a l ly va l id ca rd ina l u t i l i t y , U i ; in thepresence o f ex te rna l i t ie s , U i will i n genera l dep end on a ll dec i sions ,x o , x ! . . . . . x n . Th e n f o r g iv e n x i ( i= l . . . . . n ) , X o is c h o se n t om a x i m i z e ,

n ui (X o , x t . . . . . x n ) ,i - I

wi th r espec t to Xo ( in some f eas ib le se t ) . P resumably , x i i s chosen byind iv idua l i t o max imize ,U i ( x o , x l , . 9 .xi 9 9 .Xn),

h o l d i n g x i ( j=0 . . . . n , j = i ) c o n s t a n t .Th i s d e sc r i p t i o n o f ju s t i c e i n t h e p r e se n c e o f p r i v a c y i n v ol v es

g a m e - t h e o r e t i c a l c o n s i d e r a t i o n s ; t h e o u t c o m e i s t h e e q u i l i b r i u mp o i n t ( in t h e s e nse o f N a sh ) o f a c e r t a in g a m e . ( Th o u g h I h a v ec h o se n a u t i li t a ri a n f o r m u l a t i o n f o r i ts s i m p l i c i t y , a m a x i m i np r i n ci p le w o u l d h a v e a s im i l ar f o r m . ) A c t u a l l y , t h is v i e w p o i n tgenera l izes a p r inc ip le a l r eady fo un d in the the ory o f ju s t i ce overgenera t ions , due to P he lps and Po l l ak [ 11 ] . Th ere they assu me tha tn o g e n e r a t i o n c a n b e b o u n d b y d e s ir es o f i ts p r e d e c e s so r s .N o z i c k ' s f o r m u l a t i o n , i n t h e se t e r m s , a m o u n t s t o o m i t t i n g t h e

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space o f soc ial dec i s ions , Xo, a l t o g e t h e r . H o w e v e r , i n th e p r e se n c e o fex te rna l i t i e s , he s t i l l r equ i r es a game- theore t i ca l cons t ruc t ion .I h a v e t r i e d h e r e t o sk e t c h a p o s s ib l e a p p r o a c h t o t h e r e c o n -c i li a ti o n o f t h e c l a im s o f j u s ti c e w i t h t h o se o f a p r i v a t e s c o p e fo re a c h i n d i v id u a l . Th i s h a s t a k e n f o r g r a n t e d t h a t b y so m e p r o c e s s w ec a n d e f e n d a s e t o f p r i v a c y j u d g e m e n t s . T h e r e i s a n a l te r n a t iv ea p p r o a c h , i m p l i c i t i n m a n y d i s c u s s i o n s o f t h e v i r t u e s o f t h e p r i c esy s t e m a m o n g e c o n o m i c t h e o r i s ts a n d o t h e r s . Th i s is t o r e g a r d c la i m st o p r i v a c y n o t a s p r i m a r y v a lu e j u d g e m e n t s b u t is d e r iv e d f r o m t h ei n a b i li ty o f o t h e r s t o k n o w e v e r y t h i n g r e l e v a n t a b o u t a n in d i v id u a l .S p e c i f i c a l l y , a n i n d i v i d u a l k n o w s h i s o w n p r e f e r e n c e s a n d p e r h a p sh i s own per sona l ab i l i t i e s . Th i s knowledge i s no t d i r ec t ly ava i l ab le toa n y o n e e l s e ; t h e y m a k e i n f e r e n c e s f r o m t h e i n d i v i d u a l ' s o b se r v e db e h a v i o r , b u t i f i t is k n o w n t h a t t h e se o b se r v a t io n s w i ll b e u se d a s ab a si s f o r i n f e r en c e a n d t h e r e f o r e f o r d i st r ib u t i v e j u d g e m e n t s , t h e r ewi l l be in genera l an incen t ive to behave d i f f e r en t ly so as to improvet h e d i st r ib u t iv e j u d g e m e n t . G i b b a r d [ 1 9 7 3 ] h a s sh o w n t h a t t h e re isn o g e n e ra l w a y o f f o r m u l a t i n g a g a m e s tr u c t u r e i n w h i c h i n d i v id u a lsm i g h t n o t h a v e so m e i n c e n ti v e t o m i s r e p re se n t t h e i r p r e f e r e n c e s b ythe i r ac t ions .

One can then de l ibe ra te ly f ac to r the dec i s ion space in to soc ia land p r iva te dec i s ions so as to op t im ize a c r i t e r ion o f ju s t i ce , where i tis a s su m e d t h a t t h e p r i v a te d e c i s io n s a r e f u n c t i o n s o f i n f o r m a t i o npr iva te to the ind iv idua l , whereas the soc ia l dec i s ions a r e func t ionso n l y o f p u b l ic i n f o r m a t i o n . Th i s is th e a r g u m e n t u su a ll y a d v a n c e d t oa r gu e t h a t , a m o n g t h e w a y s o f re a li zi n g a n o p t i m u m in a c c o r d a n c ew i t h w e l f a r e e c o n o m i c s , t h e laissez-faire approach i s the bes t . I th a p p e n s t h a t , u n d e r t h e s t r o n g a s su m p t i o n s o f a b se n c e o f e x t e r -na l i t i e s and o f inc reas ing r e tu rns to sca le , i t y i e lds a Pare to op t imalso l u t io n ; h e n c e , t h e r e is n o c o n f l i c t b e t w e e n t h e d e m a n d s o f p r i v a c yand those o f e f f c i en cy . How ever , if , say , a u t i l i ta r i an c r i t e r ion o f

j u s ti c e is u se d , t h e o p t i m a l r e d i s t r ib u t i o n o f in c o m e w o u l d r e q u i r ean invas ion o f p r ivacy to es t ab l i sh sa t i s f ac t ion l eve l s . Shor t o f tha ti n v a s i o n , o n e w o u l d h a v e t o r e l y o n p r e su m p t i o n s , f o r e x a m p l e , o fequa l poss ib i li t ie s o f d i f f e r en t u t i l i ty func t io ns fo r d i f f e r en ti n d i v i d u a l s . Th e r e i s r o o m h e r e f o r a n e w f o r m u l a t i o n o f t h ep r o b l e m o f a c h ie v in g j u s ti c e in t h e p r e s e n c e o f m u t u a l u n c e r t a i n t ya b o u t p r e f e r e n c e s a n d o t h e r p e r so n a l c h a r a c te r is t ic s .O n e l a s t r e m a r k o n t h is a p p r o a c h t o p r i v a c y as a r e a c t i o n t o la c ko f i n f o r m a t i o n : i t d o e s i n a w a y p r e su p p o se a b a s ic p ri v a c y j u d g e -men t , t ha t ind iv id ia l s a r e no t r equ i r ed to r evea l the i r p r e fe rencesa n d p e r so n a l a b i l it ie s a s a m a t t e r o f o b l i g a t i o n . I t is p r e su p p o se d t h a t2 7 4


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NOZICK'S ENTITLEMENT THEORY O F JUSTICE

given any reve la t ion mechan ism they wi l l behave se l f i sh ly . I t i sposs ib le to take s ti ll an o th er tack - tha t ind iv idua ls have ano b l ig at io n to t el l t h e t ru th b u t t h a t co m m u n ica t io n i s co s t ly . A f t e ra l l , f ind ing ou t one ' s own prefe rence s t ruc tu re , espec ia l ly in a reasn o t y e t ex p e r i en ce d i s n o n e to o ea sy . H en ce , p r iv acy m ay s tilla p p e a r as a n e c o n o m y , r a th e r t h a n a m o r a l r e q u ir e m e n t o r a nunavoidab le necess i ty .

6 . O r i g i n a l A c q u i s i t i o n a n d P e r s o n a l A b i l i t i e s .B ecau se No z ick i s so co n ce rn ed to d e fen d p ro p e r ty r ig h t s i ng en e ra l , h e d o es n o t mak e a ca se wh ich wo u ld d i s t in g u i sh b e tweenperson al assets ( labo r , skil ls , and t he l ike) and m ater ia l assets . St i l l ,a s n o ted ab o v e , t h e id en t i f i c a t io n o f t ax a t io n wi th fo rced laborsuggests an awareness o f th is d iffere nce .T h e p ro b lem o f o r ig in a l a cq u i s it i o n an d th e d i f f icu l t ie s o f t h eL o ck ean p ro v i so d i s ap p ea r o r a t l e a s t a r e g rea t ly a t t en u a ted wh enrefe rence i s made to persona l asse ts . These do unmis takab ly , andc lear ly be lon g to an ind iv idua l .Bo th Rawlsian and ut i l i tar ian views im ply that pers ona l assets areava i lab le fo r red is t r ibu t ion . The ex ten t to which they can be usedmay be l imi ted by the p r ivacy cons idera t ions sugges ted in the las ts ec t io n . I t m ay b e d i f f icu l t t o k n o w th e ex ten t o f an in d iv id u a l'st a len t s an d th e re fo re i t may b e b e t t e r t o i n d u ce th e i r u se b y r eward sth an to r eq u i re i t .To s t r ip away an inessen t ia l po in t , i t i s c lea r tha t to the ex ten ttha t persona l ta len ts a re de ve loped by the use o f scarce resources ,th ey sh o u ld b e p a id fo r . I n No z ick ' s min ima l s t a t e , th i s wo u ldh ap p en au to m a t i ca l ly ; in a wo r ld wh e re ed u ca t io n is su p p l ied b y th es t at e o r b e lo w co s t , t h e re i s n o r ea so n w h y ed u ca t io n sh o u ld n o t b ep a id fo r b y th e r ec ip i en t , o f co u r se , i n way s wh ich a l lo w fo rd i ff i cu l ti e s in f in an c in g at t h e t ime o f ed u ca t io n an d fo r u n ce r t a in -t ie s in th e fu tu re r ece ip t o f in co m e .F u r th e r , t o min imize th e in t e r f e r en ce wi th p r iv acy , t h e u se o fpersona l asse ts shou ld be res t r ic ted to tax ing the income der ivedf r om t h e m .W ith these co ns t ra in ts , i t m us t be adm i t ted tha t i t is s ti ll a rguab letha t persona l assets shou ld be t re a ted sep ara te ly f rom m ater ia lassets . Personal ly , I see no consis tent argument that individuals withh igh ly va luab le na tu ra l asse ts shou ld no t share them wi th o thers .(This po in t i s no t the p lace to go in to a de ta i led d iscuss ion o fNo zick ' s analys is o f the a rgu m ents fo r and aga inst th i s pos i t ion ; le t

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m e s a y s i m p l y t h a t t h e i d e a o f a p r e s u m p t i o n o f e q u a l it y s t ri k es m ea s a p e r f e c t l y r e a s o n a b l e s t a r t i n g p o i n t f o r d i s c u s s i o n . ) O n t h e o t h e rh a n d , I h a v e s o m e d i f f i c u l t y c o n s t ru c t i n g a n a i r t i g h t a rg u m e n t i nf a v o r o f s u c h a n o b l i g a ti o n . I t w o u l d h a v e t o p r o c e e d f r o m t h e m o r a la rb i tr a r in e s s o f t h e a c t u a l d i s t r ib u t i o n o f t a l e n ts , b u t t h a t m a ya m o u n t t o p r e s u p p o s i n g th e r e s u l t.I f o n e g ra n t s s o m e r i g h ts i n p e r s o n a l a s s e ts t o a n i n d iv i d u a l, t h e nfo r ind iv idua l s l i v ing over t ime , t he re i s some c l a im to ma te r i a lp r o p e r t y . I f I p e r f o r m a s er vi ce , I m a y w a n t m y r e w a r d i n th e f u t u r er a t h e r t h a n i n t h e p r e s e n t . P r e s u m a b l y t h e re s h o u l d b e s o m em e c h a n i s m f o r p e r m i t t in g t hi s, i f th e p o s t p o n e m e n t is a d v a n t a g e o u st o o t h e r s a s w e ll a s m y s e l f . H e n c e , I a m p a i d w i th s o m e c o m m i t m e n tt o f u t u r e g o o d s . B u t w h y d o e s i t f o l lo w f r o m m y e n t i t le m e n t t o t h ep ro c e e d s o f m y p e r s o n a l a s se ts t h a t I a m a l s o e n t i t l e d t o u s e th i sc o m m i t m e n t a s fr e e ly d i s p os a b le p r o p e r t y . I s ee n o r e a s o n w h y , f o re x a m p l e , I w o u l d b e e n t i t l e d t o i n t e r e s t i n e x c h a n g e fo r t h e p o s t -p o n e m e n t . ( T h e r e m a y b e g r o un d s in ef f i c ie n c y , a n d u n d e r t h eP a re t o p r i n c ip l e o n e s h o u l d a c c e p t e f f i c i e n c y u n t i l i t i n t e r f e r e s w i t hjus t i ce . )

7. The M eaning o f Proper ty .Th i s l e ad s i n t o t h e m e a n i n g o f p ro p e r t y , a s u b j e c t w h i c h w o u l dl ea d t o a n o t h e r p a p e r . I w i ll m e re l y s u m m a r i z e s o m e v ie w s , p e rh a p sr a t h e r d o g m a t i c a ll y . N o z i c k ' s c o n c e p t s e e m s u n s o p h i s ti c a te d . H ek e e p s o n r e fe r ri n g t o t h e o w n e r s h ip o f " t h i n g s " , w h e r e a s p r o p e r t y

r e a ll y r e f e rs t o r ig h ts . T h e s a m e p i e c e o f l a n d m a y h a v e s e p a ra b l er ig h ts , f o r e x a m p l e t o s u r f a c e u se a n d m i n i n g , a n d t h e se r i g h t s m a yb e s e p a ra b l e pi e ce s o f p ro p e r t y a n d i n d e e d a r e i n m o d e rn l aw .

L e t m e t a k e t h e a c t iv i ty o f c o v e n an t in g a s a n e x a m p l e . S u p p o s e Io w n a p i e c e o f l a n d a n d i ns is t t h a t a n y s ale b e a c c o m p a n i e d b y ap ro v i s io n p ro h i b i t i n g i n p e rp e t u i t y t h e r e s id e n c e o f b l a c k s . Th a t i s,n o t o n l y d o I e x t r a c t t h i s p ro m i s e f ro m t h e b u y e r b u t a l s o r e q u i r et h a t h e p ro m i s e n o t t o s e l l i t w i t h o u t t h i s c l a u s e . A f t e r a p e r i o d o ft i m e , i t m a y b e t h a t n o o n e l iv in g w a n t s t h is c l a u s e ; b u t t h e r e is n ow a y o f g e t t in g i t r e l e a s e d . S u c h c l a u s e s w e re o f c o u r s e v e ry f a r f ro mh y p o t h e t i c a l , a n d i n d e e d w e re n e v e r d e c l a r e d i ll eg a l; i t w a s o n l y h e l dt h a t t h e c o u r t s , a s i n s t ru m e n t s o f th e g o v e rn m e n t w h i c h w a sp ro h i b i t e d f ro m d i s c r i m i n a ti n g , c o u l d n o t i n fo rc e t h e m . F u r t h e r ,cove nan t s w i th rega rd to o th e r uses , e .g ., sa le o f a l coho l i c beverages ,a r e st il l e n fo rc e d . Th i s a p p e a r s t o b e a h i s t o r ic a l t h e o ry o f j u s t ic ewi th a vengeance .2 7 6


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T h e r e is a n o t h e r w a y o f lo o k i n g a t th i s. T h e p r o p e r t y s y s te m is i nf a c t a s o ci a l c o n s t r u c t ; n o t e v e r y p o s s ib l e r i g h t , p a r t i c u l a r ly w i thr e g a rd t o t h e f u tu r e , is a p o s sib le p i e c e o f p r o p e r ty . No z ic k s p e ak s o fe v e r y th i n g c o m i n g i n t o e x i s te n c e a l r ea d y o w n e d ; b u t t h a t is m e r e l y ap a r t ic u l a r s o c ia l ly d e t e r m i n e d p r o p e r t y s y s t e m . P o l l u t i o n d o e s n o tc o m e i n t o e x i s te n c e a l re a d y o w n e d ; t h a t is th e p r o b l e m .Th e in c o m p le t e n e s s o f p r o p e r ty r ig h t s i n g e n e r al c r e a t e s wo ll-k n o wn p r o b le m s in we l f a r e e c o n o m ic s , b e in g i n f a c t t h e b a s i cc o m p o n e n t o f e x t e r n a l i t i e s . I n p a r t i c u l a r , m a r k e t s f o r f u t u r ec o m m i t m e n t s a re r e la t iv e l y u n d e r - d e v e lo p e d c o m p a r e d w i t h t h o s ef o r t h e p r e s e n t o r im m e d ia t e f u tu r e . I n d iv id u a l s h a v e t o s u p p ly f o rt h em s e lv e s e x p e c t a t i o n s a s t o f u t u r e d e v e l o p m e n t s i n o r d e r t o m a k ed e c i s io n s w i th c o n s e q u e n c e s e x t e n d in g in to t h e f u tu r e , e . g . , i n v e s t -m e n t s . T h e s e e x p e c t a t i o n s , f o r e x a m p l e o f p r ic e s o r o f s u p p lya va ila bilitie s, a r e n o t " p r o p e r ty , " b u t t h e y i n f lu e n c e t h e u s e o fp r o p e r t y a n d a re t a k e n i n t o a c c o u n t i n t h e p r e s e n t le ga l s y s t e m . F o re x a m p le , a n o b l ig a t i o n t o s ell a p r o d u c t f o r t h e n e x t f e w y e a r s a t ag iv en p r i c e is u n d e r s to o d in t h e l aw to h o ld o n ly i f c o n d i t i o n s d o n o tc h an g e i n a s t ro n g l y u n e x p e c t e d w a y ; t h is u n d e r s t a n d i n g d o e s n o tr e q ui re e x p l ic i t s t a t e m e n t . O n e o f N o z i c k 's o w n e x a m p l e s w o u l dno t , in i t s fu l l impl ica t ions , be accep ted by cu r ren t l ega l p r inc ip les .He s u p p o s e s ( p . 2 6 9 - 2 7 0 ) t h a t a s t a t i o n wa g o n wa s l e n t t o s o m ep e o p le f o r a wh i le a n d th a t t h e y b e c a m e a c c u s to m e d to i t ; t h i sw o u l d c r e a te n o o b l ig a t io n o n y o u r p a r t t o g i ve i t t o t h e m . B u t i nf a c t i f s o m e o n e w a lks a cr o ss y o u r l a n d f o r a s u f f i c i e n t ly l o n g p e r io d ,w i th o u t i n t e r f e r e n c e , h e a c q u i r e s t h e r i g h t t o p e r m a n e n t u s e . Th ev ie w i s t h a t e x p e c t a t i o n s h a v e b e e n c r e a t e d w h ic h i t wo u ld b e u n ju s tt o d e p r iv e h im o f .

I f m a r k e t s we r e s u f f i c i e n t ly c o m p le t e , w i th a ll f u tu r e s p e r io d sa n d a ll u n c e r t a in c o n t in g e n c i e s al r e a d y p r o v id e d f o r i n t h e c o n t r a c t s ,t h e c o n c e p t o f p r o p e r t y w o u l d c ea se t o b e p r o b l e m a t i c . A ll d e ci s io n sw o u l d h a v e b e e n m a d e i n a d v a n c e, a n d t h e r e w o u l d b e n o f u r t h e rq u e s t i o n s o f t r a n s f e r s t o t r e a t a s j u s t o r u n ju s t. B e c a u se i n f a c t m a n yo f t h e s e m a r k e t s d o n o t e x i s t , th e r e a r e d i r e c t n o n - m a r k e t r e la t i o n swh ic h a f f e c t i n d iv id u a l s ' l e v e l s o f s a t i s f a c t i o n . Vo lu n ta r y t r a n s f e r sb e c o m e p o s s ib l e , b u t n o t a l l c o n c e iv a b l e t r a n s f e r s c a n b e m a d e .He n c e , v o lu n t a r y t r a n s f e rs b e c o m e b i as s ed i n d i r e c t i o n , a n d th ep o s sib le i n ju s t ic e o f t h e wh o le s y s t em o f t ra n s f e r s m u s t b erecogn ized .

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8 . J u s t i c e a n d t h e C o r e .I n o t e d e a rl ie r ( s e c t io n 3 ) t h a t N o z ic k ' s e x a m p le o f t h e i s o la t e dind iv idua ls migh t lead to the conc lus ion tha t soc ie ty was en t i t le d tor e d i s tr i b u te o n ly th e g a in s o f t r a d e th a t i t p ro d u c e d o v e r a n d a b b v ewhat ind iv idua ls cou ld ge t fo r themse lves wi thou t t rade (o rc o o p e ra t io n in p ro d u c t io n ) . T h i s v ie w is i n d e e d a t t r i b u t e d to Ra w ls

b y P h el p s [ 1 0 ] .Car r ied a b i t fu r the r , a s sugges ted by Vickrey to Phe lps in thec i ted paper , th i s a rgum ent m igh t a lso sugges t tha t any g roup o find iv idua ls wi th in the to ta l shou ld be a l lowed to keep wha t th i sg ro u p c o u ld c o l le c t iv e ly a c h ie v e . On ly th e a m o u n t a b o v e th a t w o u ldbe available to so cie ty to redis tr ib ute .Form al ly , th i s can be s ta ted as requ i r ing tha t jus t a l loca t ions mu s ts a ti sfy t h e p ro p e r ty t h a t t h e r e s h o u ld n o t e x i s t a c o a l i t i o n o find ividu a ls a n d a n a l l o c a t io n th a t t h e y c o u ld a c h ie v e w i th t h e i r o wnre s o u rc e s s u c h th a t e v e ry me mb e r o f t h e c o a l i t i o n wo u ld b e b e t t e ro f f und er the i r own a l loca t ion than in the p ropo sed over -al la l locat ion.Th is i s p rec ise ly the de f in i t ion o f the c o r e o f a n e c o n o m y , a n o wwe l l -k n o wn c o n c e p t i n g a m e th e o ry a n d e c o n o m ic a n aly si s ( s e e, e. g .,I -l ildenbrand and K irma n [8 : Cha p te r 3 ] , A rrow and H ahn [1 :Ch a p te r 8 ] ) . I f o n e m a k e s th e a s s u mp t io n s o f a b se n c e o f e x t e r -na l i t i e s and o f inc reas ing re tu rns to sca le , then , i f the number o find iv idua ls in the ec on om y is la rge (a nd no on e i s la rge on the sca leo f t h e e c o n o m y ) , t h e c o re s h rin ks t o t h e c o m p e t i t i v e e q u i l ib r iu m.T h e re wo u ld b e n o p ro b le m o f j u s t ic e l e f t !T h i s is n o t p r e c i se ly No z ic k ' s c o n c lu s io n , s in c e h e d o e s n o t w i shto a s su me p e r f e c t c o m p e t i t i o n , b u t i t is c e r t a in ly c o m p le m e n ta ry toit. My own v iew i s tha t , in some deep sense , the re a re inc reas ingretu rns to scale. Th e t ru e basis for d iv is ion o f labo r is the value tos p e c ia l iz a tio n , n o t m e re ly i n t h e e c o n o m y b u t i n s o c i e ty as a wh o le .F u n d a me n ta l ly s imi la r p e o p le b e c o m e d i f f e r e n t t o c o m p le m e n t e a c ho th e r . T h i s v i sio n in fo rm s th e wo rk o f Ad a m S m i th a n d a l so Ra wls 'sc o n c e p t o f so cia l u n io n [1 2 : S e c t io n 7 9 ] . I f t h is is t r u e , th e n th ecore rem ains la rge even w i th m any ind iv idua ls . Th ere a re la rge ga insto s o c i a l i n t e r a c t io n a b o v e a n d b e y o n d wh a t t h e i n d iv id u a l s a n ds u b g ro u p s c o u ld a c h ie ve o n th e i r o wn . T h e o wn e r s o f s c a rc e p e rs o n a lassets do no t have a p r iva te use o f these assets which is cons iderab le ;i t i s on ly the i r va lue in a large sy s tem which m akes these assets

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N O Z I C K ' S E N T I T L E M E N T T H E O R Y O F J U S T I C Ev a l u a b le . H e n c e , t h e r e i s a s u r p lu s c r e a t e d b y t h e e x i s t e n c e o f s o c i e t ya s s u c h w h i c h i s a v a i l a b le f o r r e d i s t r i b u t i o n .

H A R V A R D I N ST IT U T E O F E C O N OM I C R E S E A R C HH A R V A R D U N I V E R S I T Y

C A M B R I D G E , M A S S A C H U S E T T S 0 2 1 3 8U . S . A .

R E F E R E N C E S[1 ] A R R O W , K . J . , a n d F . H . H A H N 1 97 1 General Competitive Analysis.

S a n F r a n c i s c o : H o l d e n - D a y , a n d E d i n b u r g h : O l i v e r & B o y d .[2 1 B E R G S O N , A . 1 9 3 8 A r e f o r m u l a t i o n o f c e rt a in a s p e c t s o f w e l f a r e

e c o n o m i c s . Quarterly Journal o f Economics 5 2 : 3 1 0 - 3 3 4 .[ 3] B U C H A N A N , J . M . 1 9 5 4 I n d iv i d u a l c h o i c e i n v o t in g a n d t h e m a r k e t .Journal o f Polin'cal Economy 62: 334-343 .[ 4 ] C A R R O L L , L E W I S n . d . The Complete Works of Lewis Carroll N ewY o r k : T h e M o d e r n L i b r a r y .

[51 E D G E W O R T H , F . Y . 1 88 1 MathematicalPsychics. L o n d o n : C . K e g a nand Pau l .[6 ] E D G E W O R T H , F . Y . 1 89 7 T h e p u r e t h e o r y o f t a x a t i o n . EconomicJournal 7. The re l evan t po r t io n i s r ep r in t ed in R . Musg rave and A . T .Pea cock (eds .) 1958 Classics in the Theory of Public Finances, L o n d o nand N ew Yo rk : M acmi l l an , pp . 119 -136.[7] G IBB AR D, A. 1973 Man ipu la t ion o f vo t ing schemes : a gene ra l r esu l t .Econometn'ca 41 : 58 7-60 I .[ 8] H I L D E N B R A N D , W . , a n d A . P . K I R M A N 1 9 76 Introduction toEquilibrium Analysis. A m s t e r d a m a n d O x f o r d : N o r t h - H o l l a n d , a n d N e wYo rk : Am er i can E l sev ie r.[ 9 ] N O Z I C K , R . 1 9 7 4 Anarchy, State and Utopia. New York : Bas i c Books .

[ 1 0 ] P H E L P S , E . S . 1 9 7 6 R e c e n t d e v e l o p m e n t s in w e l f a r e e c o n o m i c s : j u s t i c ee t & iui t6 . Di scuss ion Paper 75 -7617 , t he Eco nom ics W orkshops ,C o l u m b i a U n i v e r s i ty .[ 11 ] P H E L P S , E . S . , a n d R . A . P O L L A K 1 9 6 8 O n se c o n d- b e st n a t io n a lsav ing and g am e-equ i l i b r ium g row th . Review of Economic Studies 3 5 :185-200 .[12 ] RA W LS, J . 1971 A Theory of Justice. Cambr idge , Mass . : HarvardU nivers i ty Press.

[ 13 ] S A M U E L S O N , P . A . 1 9 47 Foundations of Economic Analysis.Cam br idge , M ass .: Harvard Un iver s i ty P ress .[ 1 4] S E N , A . K . 1 9 7 0 Collective Choice and Social Welfare. S a n F r a n c i s c o :

l-lolden-Day.[15 ] S IDGWlCK, H. 1893 The Methods o f Ethics. F i f t h E d i t i o n .2 7 9

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